Activision Blizzard to Buy Out Vivendi's Shares

[Strazdas]

Fair enough, it does seem that the company is buying itself out with money that belongs to vivendi after all. Gota love those illogical business laws.

Kinda sorta? While Vivendi is a major shareholder, it can't technically withdraw money unless it is disbursed through to the other shareholders. Which is what they wanted Actiblizzion to do.

I look forward to this. Whatever happens next, it won't be boring.

Also: Bloomberg link for number crunchers.
http://www.bloomberg.com/news/2013-07-26/activision-management-to-buy-vivendi-stake-for-8-17-billion.html

Following all accounting measurements, vivendi technocally owns 63% of blizzard assets, and that includes 63% of money they are using to buy themselves out. unless you are implyign that they are buying 63% with money from 37% and still ahve 3 billions (thats 36% of the money they are already paying, so 63% turns 36%?). so yeah, they are still paying vivendi with the money vivendi owns.
technically it can say "were closing doors today" and being major shareholder they can then split thier 63% cut. while granted its assets and its market share may be vastly different, they can extract money.
Then again activision is funding it with 4.6 debt. so this may jstu as well be the other shareholders money and technically not vivendis own money. but we are really trying to pull a fast one with this logic.

 

[Karadalis]

Jeesus.. look at the numbers being thrown around here.. and all that almost exclusivly from world of warcraft....

No wonder everyone and their grandmother wanted a piece of that fat cake with their own WoW clones....

 

[Fraggy1]

Surprised Disney weren't in for ActiBlizzard.

 

[TiberiusEsuriens]

Okay, good on them and all for standing up to this bullshit, but after they become their own company what's next?

Correct me if I'm wrong but before Microsoft and EA hate were the norm Activision held the ire of gamers for reasons I don't fully understand. (I never read up on them.)

My point being, after they own themselves what's to stop them from following in EA's footsteps. They'll have no more oversight, not that Vivendi was all that good in the first place. And there's no guarantee that they'll actually listen to their customers at all.

That's the big question: If this goes through, where will Activision go from there?

Kotick used to be the gaming devil, but it's been over a year since he said/did anything terrible. It's probably his coworkers helping him to mellow out, but probably he just learned to bite his tongue. There's only space for one devil, so why cling to Koticktivision when EA is such an easier target right now?

As for what they do now? Vivendi was a major conglomerate and considered ActiBlizz too small to really care about. I bet that some of what Kotick used to say came from those guys. Now that the game company will be run again strictly by more gamey people there's a decent hope they'll start to focus on better games instead of better money suckers.

It's extremely optimistic, but I totally see Blizzard's philosophy having a positive effect on the Activision upper management.

 

[LetalisK]

there is nothing else on their release schedule (barring two rumoured D3 expansions which may or may not be bullshit and that are unlikely to generate much enticement even if they do exist) and wow is dying (albeit slowly) and is slowly but clearly laying the groundwork to change its business model (ie go F2P) at a later date something it was probably meant to do when titan launched.

Diablo 3 has 1 million unique players per day, 3 million per month, and a total possible recidivism pool of 12 million players. I don't think they'll have a problem drumming up interest in D3 expansions.

Edit: Realized your argument wasn't about money, so edited out the irrelevant parts. As for their Valve-esque creeping development pace? Good. Blizzard is known for being anal about their games[footnote]Even scrapping entire operational games just because it didn't meet their expectations[/footnote] and I'd have it no other way. We could use a couple more examples of developers that give that much of a shit. Most developers probably don't have that luxury, but it's nice to see one that does actually use it.

 

[Jynxed]

Now I have to decide what to do with my stock...been sitting on it waiting for it to get above 16 before selling but it's up over 17 now. Have to wonder if it goes up some more and stabilizes or if it's gonna drop.

 

[Charli]

Good. I mean Activision is the suck and Blizzard is holding on to old IP nostalgia to hold afloat, but...fuck Vivendi. Fuck them and fuck their greedy malpractices. And I'm glad Acti-Blizz are out of this poisonous leech of a relationship.


This is a healthier outcome for the gaming industry. So... Yeah. Good.

 

[walrusaurus]

am i the only person that looks at Blizzard and sees they basically have no new game releases lined up ?
once D3 on consoles and the last SC2 "expansion" is out there is literally nothing on their release schedule...

Thats pretty par for the course for blizzard. They dont exactly crank out titles. Not counting expansion packs they've released 3 games in the last 11 years; 2 of those in the last 3. WoW represents a massive, ongoing investment of resources to maintain and expand. Even as massive as blizzard is its basically a given that they won't return to anything resembling a "normal" development schedule until WoW is dead and gone. (so basically never)

 

[MCerberus]

Imagine how risk-adverse Activision (already the CoD factory) would have become if Vivendi forced the bloodletting. The last thing the game industry needs is the prospect of corporate raiders.

Side note: if I were a Vivendi shareholder my first question would be, "So how did this company get to the point where we had to sell off the only part making money BECAUSE IT WAS MAKING TOO MUCH MONEY?"

 

[Scars Unseen]

I was going to say that I was hoping that Activision would fold, but then I realized that the company isn't even relevant enough for me to hate. EA gains my ire chiefly because they publish, ruin and then doom developers and titles I actually like. The last Activision game that even popped up on my radar was Prototype back in 2009. Okay, maybe Blizzard gets some fist shaking for Diablo 3 and the fractured release of Starcraft 2, but I don't really like RTS or clickfest(have no idea what they're actually called) games anyway, so it was mostly the story I was looking forward to on those.

So I guess.... meh?

 

[LordMonty]

Surprised Disney weren't in for ActiBlizzard.

They've been buying a lot of late so guess they're out of loose change... but seriously... don't encourage them god help us the resultant mega corp could threaten the free world.

But on topic i'm pleased that they Bliz/act is safe may not always produce games i want desperately but there is enough i care about and a hell of a lot of jobs at stake.

 

[NvrPhazed]

Surprised Disney weren't in for ActiBlizzard.

They've been buying a lot of late so guess they're out of loose change... but seriously... don't encourage them god help us the resultant mega corp could threaten the free world.

But on topic i'm pleased that they Bliz/act is safe may not always produce games i want desperately but there is enough i care about and a hell of a lot of jobs at stake.

Disney isn't in the market for making games. They see it as too high risk of an investment with thin profit margins for AAA titles. That is why they gutted LucasArts and are content to license out their IP's.

 

[Atmos Duality]

Thats pretty par for the course for blizzard. They dont exactly crank out titles. Not counting expansion packs they've released 3 games in the last 11 years; 2 of those in the last 3. WoW represents a massive, ongoing investment of resources to maintain and expand. Even as massive as blizzard is its basically a given that they won't return to anything resembling a "normal" development schedule until WoW is dead and gone. (so basically never)

They will have to provide an heir to the WoW-throne eventually and sooner rather than later as WoW's subscriber numbers continue to erode. It's a powerful revenue stream, but it's not 'invincible' anymore.

 

[Baldr]

am i the only person that looks at Blizzard and sees they basically have no new game releases lined up ?
once D3 on consoles and the last SC2 "expansion" is out there is literally nothing on their release schedule...

Hearthstone, it is generating a ton of buzz for a free-2-play game, even outside traditional gaming circles, due out by the end of the year.
WoW Expansion 5 is being announced in November
and then there is Titan probably being announced in November, but they said possibly 2014 before any real announcements.

 

[SamTheNewb]

Oh, nice, you can now buy yourself with money that you have that are legally owned by the guy that your buying yourself from. this is the highest level of corporate law douchmbaggery in a while.

Vivendi is selling ownership of Actiblizz for cash. This is a normal stock buyback. As you can see, because of the large amount of financing done to perform the transaction, Activision Blizzard does not actually have as much money that they are paying for the return of the stock. Vivendi is getting more cash than they would otherwise have been entitled too as a partial owner of Activision Blizzard.

Actiblizz has 1.12B shares outstanding. Reading the articles suggest about 4.2 billion cash on hand for Actiblizz, before the transaction, meaning there is about $4 in pure cash per share. the remaining $11 of the share value comes from all the other valuation from the company. In actuality Vivendi couldn't have forced dividends anywhere near even $4 without getting their asses, and Activision Blizzard hauled to court by the rest of the shareholders.

This is a large purchase for sure. And their market cap is all screwed up . The 17.46 pricing now includes the fact that 38% of the shares are disappearing, the valuation of the company will be divided amongst fewer shares. 1120M shares before and 691 shares afterwards. At $17 that would make it's market cap 11.747B after the transaction. Actiblizz is losing 5.83B in value from the transaction, so, reversing the transaction, the valuation is about 11.747 + 5.83 = 17.577B, or 15.69 per share prior to the transaction. It is still about a ~$2 discount Vivendi is giving in order to perform the transaction, but it is the fastest way Vivendi can get cold hard cash. And that $4 that Kotick and Kelly is getting for free by being allowed to buy the stock at the discounted price must be good for them.

 

[lacktheknack]

Surprised Disney weren't in for ActiBlizzard.

Because nothing says "Disneyana" quite like the things that Activision and Blizzard release!

<img width=350>http://us.blizzard.com/_images/games/d2/wallpapers/wall2/wall2-1600x1200.jpg

<img width=350>http://www.hdwallpapers.in/walls/call_of_duty_black_ops_2_video_game-HD.jpg

...Huh.

OT: I'm surprised that they didn't do this earlier. I thought companies hated having a majority shareholder.

 

[generals3]

Following all accounting measurements, vivendi technocally owns 63% of blizzard assets, and that includes 63% of money they are using to buy themselves out. unless you are implyign that they are buying 63% with money from 37% and still ahve 3 billions (thats 36% of the money they are already paying, so 63% turns 36%?). so yeah, they are still paying vivendi with the money vivendi owns.
technically it can say "were closing doors today" and being major shareholder they can then split thier 63% cut. while granted its assets and its market share may be vastly different, they can extract money.
Then again activision is funding it with 4.6 debt. so this may jstu as well be the other shareholders money and technically not vivendis own money. but we are really trying to pull a fast one with this logic.

You're misunderstanding the stock market. What's happening here is that Vivendi had stocks which gave them technically ownership to 63% of the assets. Now this ownership is valued through stock prices. What Activision did is basically pay the monetary equivalent of what vivendi owned in order for vivendi to give up the ownership claims.

 

[SinisterGehe]

Diablo 3 has 1 million unique players per day, 3 million per month, and a total possible recidivism pool of 12 million players. I don't think they'll have a problem drumming up interest in D3 expansions.

Don't forget that even if WoW's playerbase has reduced from 8 million to 6.2 million that's still 6,200,000 x ~12.00?/m (I rounded up all currencies) 74,400,000? And after all the cost of keeping wow running I am sure they still have some cash to use in case things go wonky, even if WoW playerbase would keep decreasing every month.

They won't go bankrupt specially when there is still interest on stock market for them.